The federal government should devise a long-term policy to improve export-oriented milk production in the country, dairy farmers said. “Such a step at policy level should have been taken to create enabling environment for existing and new investors in the dairy sector,” said Haroon Lodhi, chief executive officer of Corporate Dairy Farmers Association (CDFA).

Talking about the government’s budgetary policies for the dairy sector, the CDFA official said presently 14 large scale corporate dairy farms were working in Pakistan: 11 in Punjab and three in Sindh. “These farms produce around 320,000 liters of milk daily from 17,000 cows,” he said. Suggesting steps to increase diary production, Lodhi said the government could take grass-root level decision on legislative front, besides devising policies to safeguard the farmers’ interests.

The intervention of government can enhance knowledge and skills of the manpower involved in dairy farming, the CDFA chief said. “Lack of proper extension services is another source of concern for farmers,” Lodhi said adding that the government could develop effective extension services for small farmers’ uplift. Expressing concern over the absence of modern laboratories, he suggested that the government engage INGOs and donors for programmes of dairy development, particularly ones relating to market linkages.

On documentation of dairy sector, he said major flow of dairy production was coming through informal channel. “Only five percent or less milk is routed through formal sector,” he said.

Government, Lodhi said, could enhance the formal sector’s share through incentivizing the formal dairy supply chain that includes farmers and other value-chain stakeholders. Also worthwhile to this effect, he said, would be creating public awareness regarding food safety risks involved in the consumption of loose milk. “Government should also devise effective policies to minimise the price gap between loose milk and packaged milk,” Lodhi stressed. Lodhi, who thinks the Budget FY16 did not incentivized dairy sector, said the sector was facing hurdles like the absence of good quality animals having genetic potential of high production, lack of modern husbandry practices and knowledge and skills.

“The untrained manpower, limited use of modern technologies and equipment, and our inability to control diseases of economic importance are also hindering development of the sector,” he added. Access to market, policy issues and international trade also needed to be addressed to resolve problems of dairy sector. The sector was haunted by challenges like non-refunding of sales tax, unavailability of required vaccines for exotic animals, general policy issues pertaining to enabling environment for dairy business in the country and lack of value-addition and integrated farm approach.

“Sales tax has been imposed on value-added dairy products that would discourage the formal dairy sector and would encourage the informal dairy supply chain,” he said. Other discouraging budgetary provision, Lodhi cited, was taxing the import of feed ingredients like soybean, a vital component of cattle-feed. Measures like these, the CDFA chief warned, was piling pressure on the already struggling dairy sector.